Authorities laid on heavy security for the visit, but the marches drew only a few hundred people, unlike in Athens and Madrid, where demonstrations have drawn tens of thousands and sometimes become violent. Some hooded protesters pushed over a barricade keeping them away from a venue where Merkel was due to appear, and riot police with shields and dogs were deployed to push demonstrators back.

Merkel praised Portugal's coalition government for complying with the terms of its bailout agreement. Germany and other bailout lenders â¿¿ the other eurozone countries, the International Monetary Fund and the European Central Bank â¿¿ are keen for Portugal to stay the course, sparing the continent more difficulties like those in Greece.

The Portuguese government predicts a third straight year of recession in 2013, and the jobless rate has risen to almost 16 percent.

"I think Portugal's conditions for growth have improved greatly recently because of this adjustment program and the courageous action of the government," Merkel told reporters.

"We have to keep our word" on promises to cut debt levels, she said, adding that austerity must go hand-in-hand with reforms to make eurozone countries more internationally competitive.

"It will be a tough path," she said.

The visit came at a tense moment for the government, which is steering another austerity budget through Parliament. The 2013 state budget includes what Finance Minister Vitor Gaspar has called "enormous" income tax hikes that many observers say will choke growth and make it harder for the country to pay off debt. The government has an overall parliamentary majority, allowing it to force through the measures in a vote scheduled for the end of the month.

Merkel's visit coincided with the start of the sixth regular assessment by international inspectors of Portugal's progress in implementing the bailout agreement. The assessment is expected to last about two weeks.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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